Plumbers, electricians, and other contractors are trusted to perform a job according to an agreed-upon contract and with a certain level of professionalism. Purchasing the necessary surety bonds proves to potential customers that you take responsibility for your work and that you strive to perform a job according to customer expectations.
If complications prevent you from completing a job, the company that issued your bond becomes responsible for any resulting financial losses that the customer faces. In the simplest sense, a surety bond is a guarantee that you can perform the job. Below we discuss three of the main types of surety bonds and a few of their sub-categories.
Contract Surety Bonds
- Bid bond: A guarantee that the bonded contractor who bids on a project will then post a performance bond and begin work in a timely manner if their bid is accepted.
- Performance bond: A guarantee that the bonded contractor will perform the job and if not, the project owner can be compensated for financial losses.
- Payment bond: A guarantee that suppliers and sub-contractors receive payment for their contributions to the bonded project. This type of bond is often issued alongside performance bonds.
Commercial Surety Bonds
- Auto dealer bond: A guarantee that a motor vehicle dealer is licensed and legally qualified to sell vehicles for profit.
- License bond: A guarantee that the bonded contractor will obtain the licenses or permits that are necessary to meet city, county or state laws before beginning work.
- Sales tax bond: A guarantee that a bonded business will transfer collected sales tax to the state government.
Fidelity Surety Bonds
This type of bond acts as a form of protection for employers who may have dishonest and/or fraudulent employees on staff. This includes protection against theft and embezzlement.
Learn more today. Call Ten Eyck at (518) 464-0059 for more information on surety bonds.